I am the director of the Tax Policy Center (TPC), Paul Volcker Professor of Public Administration and International Affairs at the Maxwell School of Syracuse University, and a research associate at the National Bureau of Economic Research and the Center for Policy Research. My research focuses on federal tax and budget policy. In 2002, I co-founded the TPC. I served several stints in government, including as Deputy Assistant Secretary for Tax Analysis at the US Treasury and Senior Analyst at the Congressional Budget Office. I was president of the National Tax Association from 2010-2011. I have a Ph.D. in economics from the University of Minnesota and a B.A. from Wesleyan University. I have four adult kids and am married to my college sweetheart, Missie Burman. I'm an avid bicyclist and sing baritone in the Syracuse Oratorio Society. I also like to cook.

The author is a Forbes contributor. The opinions expressed are those of the writer.

Why the Tax Code is a Mess, Graphically

I just came across this bar chart, which illustrates graphically why the tax code is such a mess. The Joint Committee on Taxation (JCT) is the official scorekeeper for all tax legislation passed by the Congress. The chart shows the number of requests for estimates and other analysis that they’ve received from Congressional offices since 1986. Most of the requests are for estimates, which are necessary if a member wants to get a piece of tax legislation seriously considered. The chart doesn’t say how many are for new credits, deductions, or other tax breaks (although a quick perusal of the Congressional record suggests that proposals for tax breaks far outnumber proposals for new taxes or tax increases). It doesn’t say how many came from members of the Ways and Means Committee and Senate Finance Committee, which are actually responsible for tax legislation, or from other members whose efforts in the tax arena are purely symbolic unless they find a cosponsor on a tax-writing committee.

But the growth in the number of requests is astonishing–1,373 percent between 1986 and 2009. And the 6,983 requests in 2009 was not even the record. The all-time peak was 2007 with 7,786 requests. What’s remarkable about the growth is that 1986 was the year that the Tax Reform Act of 1986 passed. The JCT was really busy that year. There were 474 requests. But since then, the trend has been almost exponentially upward.

Here are the same data grouped by Congressional term. (Most of the requests are made early in each two-year Congress as members try to get their great new ideas on the agenda.)

It would be nice to think that our legislators are working hard trying to find ways to make our tax code simpler, fairer, and more conducive to economic growth. (One member, Senator Ron Wyden of Oregon, has worked tirelessly to try to advance the cause of tax reform, but he has few allies in this quest.) Maybe some are even pondering how to raise enough revenue to pay for the government. But I doubt that’s the prime driver. The tax code has now become the tool of choice to give away goodies.

It is the 21st century pork barrel.

Fortunately, the JCT only has time to look at a fraction of the great tax ideas coming out of Congressional offices. Nonetheless, some real doozies still squeak through. And that’s one reason why our tax code is such a mess.

﻿Corrections: An earlier draft referred to Congressional sessions when I really meant Congresses–the two-year term that includes two Congressional sessions. We are currently in the first session of the 112th Congress. The second chart shows data for each Congress from the 100th Congress (1987-88) to the 111th (2009-10). I also removed the modifier “tiny” before the fraction of requests JCT could handle. As far as I know, the actual number of requests that JCT responds to is not made public. I know from conversations with JCT staff and Hill staff who request estimates in vain that JCT can only satisfy some of its requests, but don’t know how small the fraction is.

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I believe that the progressive (in the ordinary sense of the word) shift to a permanently temporary tax code is responsible for most of the JCT estimate churning. The code contains so many time bombs that leaving it alone is politically infeasible. New tax law is required, with new JCT estimates, every year just to retain current tax policy, let alone change anything.

If current tax law contained nothing but a projection of current policy into future years, this problem might not exist.

When friends of mine complain about lobbyists, I frequently suggest many of them would likely go away if there were not so much to lobby for – the tax code is one of the prime methods to extract rewards for constituents – it is also a fairly invisible means of redistribution, so few complain. The lack of political will is understandable, but unfortuate and distressing, as there are few people that I know that wouldn’t support a simplified tax system / flat tax.

That’s a good example how everything within the government is bloated and complicated. In my honest opinion, when need more “common sense” folk, and less coporate puppets. Put us on a simple tax code, that can be tweaked during times of surplus or deficits.

The problem are the yahoos in office(not all of them) just the ones log jamming the entire process for greed.

Perhaps, just perhaps, the explosion of new forms of media will help end this game by alerting citizens to the true cost of meddling with the tax code. Just as we now understand the mechanics of failing to index tax brackets, I’m hopeful the country is getting smarter about these other fiscal games.